Anterra Energy Inc. has entered into a Joint Venture with Reece Energy Exploration Corp with the signing of three separate agreements. Under the terms of the agreements Reece will invest $3.5 million, primarily in the drilling, completion, fracture stimulation and equipping of horizontal wells on Anterra's lands at Frontier in south western Saskatchewan through development drilling in the Lower Shaunavon formation.
"We now have six Upper Shaunavon vertical oil producers on the Frontier property and these wells have given us good geologic control over the extent of both the Upper and Lower Shaunavon formations", said Owen Pinnell, Chairman and CEO.
"Vertical wells however are small producers and the true potential of the field lies in improving the production potential of both the Upper and Lower Shaunavon formation through horizontal development. Reece has had success with horizontal wells and multi-stage completions on several projects in Saskatchewan and brings this knowledge and experience to the Frontier project."
Pinnell continued, "A successful horizontal completion in the Lower Shaunavon will deliver significant incremental reserves and give us the confidence to embark on a more ambitious development program."
The Agreements create an area of mutual interest ("AMI") between Reece and Anterra covering twenty townships. Pursuant to the terms of the Agreements, once Reece has fulfilled its earning obligations, Reece will have earned fifty (50%) percent of Anterra's interest in all available mineral rights, including existing production in the Upper Shaunavon, as well as the Lower Shaunavon rights on approximately 1,500 net acres. Reece and Anterra have agreed that Reece will operate the drilling and completion of all new wells drilled on the joint venture lands. The earning obligations of the Agreements are expected to commence immediately with completion anticipated by December 31, 2008.
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